Carbon tax could add €600 to contractor charges

Carbon tax could add €600 to contractor charges
Ministers at the Budget 2019 press conference, from left, Regina Doherty (Social Protection), Michael Creed (Agriculture); Simon Coveney (Tanaiste, Foreign Affairs and Trade), Heather Humphreys (Business, Enterprise and Innovation), Shane Ross (Tourism, Transport and Sport). Picture: Gareth Chaney/Collins

The average dairy farmer can expect to pay as much as €600 extra per annum for contractors, within ten years, after the Budget brought a 1.6% carbon tax increase in agri-diesel charges, which is expected to be repeated every year for the next ten years.

Contractor charges would increase by even more if there are other inflationary trends.

Tuesday’s Budget as usual brought mixed news from a farming perspective, with another negative being the general stamp duty rate on commercial property sales and transfers increasing to 7.5% this week except for transactions already in contract.

This increase in stamp duty makes the purchase of land quite expensive, says our finance correspondent Kieran Coughlan.

Overall, the Budget’s main measure was spending of more than €1 billion to prepare Ireland for “the worst” effects of a no-deal Brexit.

Finance Minister Paschal Donohoe said the context for Brexit has now shifted to no-deal “as our central assumption.”

Agriculture, enterprise and tourism sectors will share €650 million of the Brexit preparation funds, which will be released in phases for the regions that would be hardest hit by a no-deal Brexit, when the full impacts of Brexit emerge.

Another €355m was budgeted for general preparations for Brexit, including investment in ports and airports.

Increased charges by contractors is where many farmers will see the effect of a carbon tax increase in fuel costs.
Increased charges by contractors is where many farmers will see the effect of a carbon tax increase in fuel costs.

It was confirmed that Ireland will also seek extra cash from Brussels to support its agriculture sector.

Agriculture Minister Michael Creed said this week’s Estimates provide €1.647 billion for his Department, €51m more than in 2019, a 3% increase.

He said the Brexit package provides an immediate €85m support for the beef sector and €14m for fishing.

Re-orienting production and marketing towards non-UK markets gets €5m, and improving competitiveness gets €6m.

About €6m is earmarked for other livestock farmers and the mushroom sector, and €5m for food and drinks processing.

“While supports cannot fully address the negative effects of a No Deal for the agri food and fisheries sectors, this first tranche of supports will be used to ameliorate the immediate impact on farmers and fishermen.”

“Regardless of Brexit, I am providing almost €85m in targeted schemes to support sustainable beef farming.

“This includes almost €45 million for the Beef Data and Genomics Programme and a further €40m for targeted supports.”

The options considered include continuation of the BEEP suckler cow/calf weighing scheme, with a view to it becoming part of the next rural development programme.

Another option is support for beef farmers rearing dairy beef animals. “There is real potential for dairy beef to provide a new income stream for beef farmers, provided we get the fundamentals right,” said the Minister.

Encouraging farm practices that ensure the very highest standards of animal welfare on beef farms is another option being considered for the €85m, but included are €18m for continuation of the sheep welfare scheme, and €1.6m extra for a that the budget for Bord Bia promotion of beef and sheepmeat.

Minister Creed said more than €12m extra will go for TAMS farms grant aid, for investment in environmental and competitiveness measures. Provision for agri environment schemes is increased by €5m. A further €1.2m is provided for development of the organic sector.

IFA’s Joe Healy acknowledged the €150 increase in the Earned Income Tax Credit, closing the gap between the self-employed and PAYE sector, but short of the full €1,650 in the programme for Government. He said the carbon tax will disproportionately affect farmers and rural dwellers, and was disappointed there was no Budget reference to the Fair Deal Scheme.

ICMSA President Pat McCormack said Budget 2020 is a profound disappointment to farmers, with no sense of urgency around the threat facing Irish farming.

“The Government has simply washed its hand of the many challenges facing farmers”.

ICSA welcomed an increase in NPWS Farm Plan funding to €1m.

Mr Creed said planting by Coillte in partnership with Bord na Mona can support afforestation at the targeted annual level of 8,000 hectares.

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